Cape Town - Dire warnings have been issued about a proposal to give South African farmworkers half of the farms they labour upon – with some cautioning that the country’s entire banking system could be left vulnerable.

Land stakeholders have 10 months left to support or fight proposed legislation that will force farmers to give up half the ownership of their farms.

In the Western Cape, this would apply to 5 500 to 6 000 registered commercial farms, plus many smaller farms. The legislation has been slammed by Agri Wes-Cape, which represents most of them.

Minister of Rural Development and Land Reform Gugile Nkwinti completed the final draft of the “relative land rights proposal” in February, under the “Final policy proposals on ‘Strengthening the relative rights of people working the land’.” The deadline for feedback is in April next year.

The legislation is specifically to rekindle “the class of black commercial farmers which was deliberately and systematically destroyed by the 1913 Natives Land Act, reinforced by other subsequent pieces of legislation enacted by successive colonial and apartheid regimes”.

“The moral basis for these proposals is that fellow South Africans who benefited from the proceeds of the land dispossession wars and the race-based segregation policies and laws of successive colonial and apartheid regimes have a moral duty and responsibility to contribute to the restoration of justice and national reconciliation effort. Secondly, maintaining the current status quo is politically undesirable and unsustainable,” Nkwinti said.

The draft legislation reads: “The regime being proposed here is based on the relative contribution of each category of people to the development of defined land portions or farm units.

“The historical owner of the land automatically retains 50 percent of the land, while the labourers on the land assume ownership of the remaining 50 percent, proportional to their contribution to the development of the land, based on the number of years they had worked on the land.”

In response to the news of the date for comment, Western Cape Economic Opportunities MEC Alan Winde, whose portfolio includes agriculture, said: “Obviously, land reform is of critical importance. In fact, it would be a great risk not to address land reform…

“But any draconian legislation will endanger our entire agriculture industry – and all the industries in the agriculture value chain, like shipping, logistics and many more.

“The last thing you want is to threaten the industry, as this can cause jobs to be shed, and a stop to new capital investment into agriculture.”

Instead Winde argued in favour of “share equity schemes”, whereby the government funded farm workers to buy shares in farms, to become partners with the farm owners.

“We have 81 schemes in the Western Cape, and all of them are sustainable,” Winde said. “If the national government gives more support for these schemes, we will see more of them becoming successful.”

The key distinction between what the new proposal, and share equity schemes, is that farmers are incentivised rather than forced to give up half their ownership, Winde explained.

The Nkwinti’s spokesman, Mthobeli Mxotwa, said the various land stakeholders had been given a year to discuss and then present responses.

Agri Wes-Cape chief executive Carl Opperman told the Cape Argus on Sunday night: “We’ve been in discussions with the minister for more than two years now. The effect of what he’s saying is simply not feasible. First, if you look at the debt the farmers have on their land, in some cases it’s more than 50 percent, so if a farmer is forced to give up 50 percent ownership, he will, in effect, own nothing – he will have no equity left.

“Second, it is not economically viable, because of agriculture’s required economies of scale. In fact, we believe it’s going to negatively impact the economy of the whole country, especially the banking system.”

Opperman explained that the banking system could crash if bonded land lost value dramatically, due to a rush by farmers to sell, for example.

“Then, on the emotional side, this proposal creates expectations for land, which is not going to be fulfilled, because we believe there’s not a court in the country which is going to uphold this legislation, as it is at present,” Opperman warned.

But Opperman confirmed they were working actively to negotiate and contribute towards a “more workable solution”, which was not as “dangerous” to South Africa’s economy.